Portland sued Electric Lightwave for unpaid franchise fees (5% of gross revenues) required under their contract to use city streets. ELI claimed the 1996 Telecommunications Act made the contract unenforceable. The court ruled that revenue-based fees for using public rights of way are legal and not blocked by federal law, though certain most-favored-rate provisions were preempted. This matters to subcontractors because it confirms cities can enforce franchise agreements and fee obligations even when federal regulations apply.
Revenue-based fees tied to use of public rights of way are enforceable—federal telecom law doesn't automatically void them
Check your contract for 'most-favored-rate' clauses; these specific provisions may be unenforceable under federal law